The obscurity of medical services pricing

I've often wondered about pricing in the healthcare industry. It is so obscure. I'm very grateful to NPR for exploring this issue recently on Planet Money's Hospital Prices, Revealed! (Sort of).

First, I'd like to recount my fun visit to the hospital on New Year's Eve, 2010 (through Jan 1, 2011). Well, I won't get into the details of WHY I ended up in the hospital (new CGM + too much wine = low blood sugar and friends calling 911).

I will talk about the time a $10,000 bill that made its way to my mailbox. To make a long story short, I ended up making the hospital audit its own bill and contested the claim with the insurance company along with a two-page narrative with exhibits A-H showing why I was right. In the end, they sent me an anticlimactic letter saying that my bill had been adjusted and guess how much I owed? $35 (the amount of the emergency room copay).

What I was astounded by was the pricing of the itemized bill. (Apparently you can get your hands on these if you submit and sign the right form.) Items such as:

• Laboratory $78
• Unicyclin $109
• Emergency room $2151
• Observation room $1051
• IV start $314
• Physician fee $410

That "laboratory" fee of $78? That's for pricking my finger and testing my blood! Which, by the way, was vehemently against my wishes. I told them I preferred to test my own blood with my machine, but they insisted. The Unicyclin is for one pill of anti-naseau medication. IV start is the tubing for an IV. Just the tubing. The only reasonable charge I see up there is the Physician fee!

Now, when the whole thing was over, I looked at the EoB to see how much the insurance company actually paid for these services. $33 for the unicyclin (less $76 than the bill), $13 for the lab fee (less $65 than the bill). From the NPR article: "...private insurance companies negotiate their own rates with hospitals, and the rates bear little resemblance to the list price."

So, wait. Let me get this straight. If you were charging ME, a potentially poor and uninsured diabetic, it would be 3 to 5 times what you would charge the insurance?!?! WTF.

Insurance companies, hospitals, medical service providers: SHAME ON YOU. You are all so sketchy. Just be reasonable. Have a fair price. Stop engaging in this racket that bankrupts people and leaves them fat, sick, and/or dead. Have some goddamned decency. 

"It's no secret that hospitals' list prices are ridiculously high and seemingly arbitrary."
It is a secret (to me, at least) why Americans are willing to put up with this racket.

"But your policy is going to kill me!"

OK, so the medical equipment supplier won't approve my plea to get the new Dexcom G4 system, and thus I will need to stay on the crappy old system for a bit. Fine. I understand that what I'm asking for is kind of nitpicky, and yes, I can chill out on my current CGM for the remaining two months it's under warranty. But I really want the new Dexcom G4 system! It's amazing. 30% more accurate. Twice the range. My God, I'm drooling over it!

Here's my beef: I just don't think that an industry that deals with the health of people should be set up so rigidly. There has been a strong theme, growing bolder each day, of hiding behind policies. Some of these policies make sense (like not covering a new CGM until the last one is out of warranty). Some make ZERO sense.

I was on Harvard Pilgrim healthcare through Brandeis University, where I went to grad school. This was one of the darkest times of my life as far as coverage goes. They reclassified insulin pump supplies (traditionally classified as durable medical equipment and covered at either 80% or 100%), and instead put them under "Prescriptions." You know, like medicine and whatnot. Then, they capped Prescriptions at $2,000/year. Mind you, after the actual prescriptions I needed (insulin, test strips), I wouldn't be able to get any pump supplies, let alone a new pump, should I need one.

I calculated out how this policy would affect me: I would be covered for about 2 months of my life-necessary medical supplies. READ: I would die after 2 months. I did everything I could to fight this. I spoke with managers. I spoke with Brandeis to let them know that I would die under this policy. NOBODY CARED. (Well, they cared, but still hid behind the policy.)

How did this end, you ask? I'm obviously not dead (this happened in 2010). Cuz I'm a hoarder!!!! Mwahhahahaha! All diabetics are. If we weren't, we would be totally screwed by these policies. I had enough pump supplies to power me through grad school and until I got real insurance.

I know Obamacare has made it so insurance companies can no longer categorically deny me coverage as a type 1 diabetic (this has happened, over, and over, and over). But this is where I say "more regulation!" You CANNOT consider that real coverage. It's fake coverage. Oh, and I didn't even mention the $100K lifetime cap!